Optimal plaintiff incentives when courts are imperfect
The incentives of a plaintiff in a lawsuit are affected by a variety of legal rules. One leading example is the proportion of the fine imposed on the defendant that is awarded to the plaintiff. Another is the identity of the plaintiff himself: private litigants are motivated by the prospect of receiving damages, while government employed plaintiffs (such as public prosecutors and employees of regulatory agencies) are instead rewarded (if at all) by career advancement. The paper examines the interaction between court characteristics and plaintiff incentives on the deterrence provided by contracts/laws/regulations. It shows that a key determinant of the optimal level of plaintiff incentives is the extent to which a party arguing ``against the facts'' is able to influence the court. When such influence is possible, it is generally optimal to restrict plaintiff incentives. Implications for the use of split-award statutes, loser-pays rules, class action lawsuits, and public enforcement are discussed. In more general terms, the paper makes precise an avenue via which legal rules affect the efficacy of a legal system
|Date of creation:||2004|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2003.
"Bank Supervision and Corporate Finance,"
NBER Working Papers
9620, National Bureau of Economic Research, Inc.
- Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2003. "Bank supervision and corporate finance," Policy Research Working Paper Series 3042, The World Bank.
- Albert Choi & Chris William Sanchirico, 2004. "Should Plaintiffs Win What Defendants Lose? Litigation Stakes, Litigation Effort, and the Benefits of Decoupling," The Journal of Legal Studies, University of Chicago Press, vol. 33(2), pages 323-354, 06.
- Albert Choi & Chris Sanchirico, "undated". "Should Plaintiffs Win What Defendants Lose?: Litigation Stakes, Litigation Effort, and the Benefits of 'Decoupling'," Scholarship at Penn Law upenn_wps-1000, University of Pennsylvania Law School.
- Edward L. Glaeser & Andrei Shleifer, 2003. "The Rise of the Regulatory State," Journal of Economic Literature, American Economic Association, vol. 41(2), pages 401-425, June.
- Edward L. Glaeser & Andrei Shleifer, 2001. "The Rise of the Regulatory State," Harvard Institute of Economic Research Working Papers 1934, Harvard - Institute of Economic Research.
- Edward L. Glaeser & Andrei Shleifer, 2001. "The Rise of the Regulatory State," NBER Working Papers 8650, National Bureau of Economic Research, Inc.
- A. Mitchell Polinsky & Yeon-Koo Che, 1991. "Decoupling Liability: Optimal Incentives for Care and Litigation," RAND Journal of Economics, The RAND Corporation, vol. 22(4), pages 562-570, Winter.
- A. Mitchell Polinsky & Yeon-Koo Che, 1991. "Decoupling Liability: Optimal Incentives for Care and Litigation," NBER Working Papers 3634, National Bureau of Economic Research, Inc.
- Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
- Snyder, Edward A & Hughes, James W, 1990. "The English Rule for Allocating Legal Costs: Evidence Confronts Theory," Journal of Law, Economics and Organization, Oxford University Press, vol. 6(2), pages 345-380, Fall.
- Spier, Kathryn E, 1994. "Settlement Bargaining and the Design of Damage Awards," Journal of Law, Economics and Organization, Oxford University Press, vol. 10(1), pages 84-95, April.
- Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-1097, September.
- Katz, Avery, 1988. "Judicial decisionmaking and litigation expenditure," International Review of Law and Economics, Elsevier, vol. 8(2), pages 127-143, December.
- Spurr, Stephen J., 1991. "An economic analysis of collateral estoppel," International Review of Law and Economics, Elsevier, vol. 11(1), pages 47-61, May.
- Legros, Patrick & Newman, Andrew F., 2002. "Courts, contracts, and interference," European Economic Review, Elsevier, vol. 46(4-5), pages 734-744, May.
- Patrick Legros & Andrew Newman, 2002. "Courts, contracts and interference," ULB Institutional Repository 2013/7034, ULB -- Universite Libre de Bruxelles.
- repec:hrv:faseco:30747197 is not listed on IDEAS
- Shavell, Steven, 1993. "The Optimal Structure of Law Enforcement," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 255-287, April. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:red:sed004:723. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.